Another week has come and gone, and the grain markets were on a downward trend, especially the July Canola contract.

Future Commodity Advisor with P.I. Financial Adam Pukalo says the price for July canola declined by about 30 dollars a ton for the week.

“The last couple days we’ve see a recovery, but really still since the beginning of the month we’ve seen now the July canola contract decline from about 710 dollars a ton to where it sits about 660 right now, so a decent drop in one month’s time,” noted Pukalo, adding the November canola contract was also down from 712 dollars a ton to 636 dollars.

The July Minneapolis wheat contract was also down, 13 cents a bushel on the week, but believes there is still an opportunity to sell through rallies.

“I don’t believe we’re in a bull market for wheat here right now,” said Pukalo. “The U.S. drought monitor, released on May 30, was interpreted by some to expand dry areas, however, more recent events and forecasts do predict a moderation of drought conditions.

“Again I wouldn’t get too excited on wheat again going significantly higher on drought.”

The deal to increase the debt ceiling in the U.S. has been passed in the Senate, so it will head to U.S. President Joe Biden to sign to make it law.

Pukalo sees the deal as reassurance for the markets because “it doesn’t like uncertainty” where the volatility is, as well as creating a ripple effect for other commodities. He explains the U.S. dollar is starting to come down “potentially helping commodities”, oil prices have started to come up “perhaps on the expectation of not having a recession.”

For the outlook, one thing Pukalo is watching is the upcoming OPEC meeting on Sunday.

“There was chatter of them previously cutting supply again, however, it’s looking like that might not be the case, so next week we might see a little bit more volatility on the oil front potentially,” Pukalo said. “I think that could easily spill over to the TSX (Toronto Stock Exchange) as well too because of how energy-heavy the markets here in Canada are.

“It’s important to watch that because right now the U.S. markets are really out-performing Canada. The S&P right now this year is up over 9 percent and when looking at the NASDAQ – the main tech exchange – year-to-date we’re up about 27 percent.

“So that’s something to maybe watch for next week, how OPEC and oil is going to affect the overall markets.”